That technology trend has helped San Diego-based BofI Holdings, the parent company of what was known as Bank of the Internet USA, chart asset growth of 110 percent over the past four years — which were very tough for the banking industry.

“You had a variety of technology developments that fundamentally changed the way people were interacting with their bank,” said Garrabrants, president and chief executive of BofI Holdings. “When you’re the beneficiary of a large wave from an industry perspective, it helps.”

Today, the bank has $2.6 billion in assets and 40,000 customers in 50 states. But it has only one branch — and it’s in San Diego.

The low-cost structure of virtually branch-less banking — coupled with its nationwide reach via the Internet — allows BofI to offer attractive features to lure depositors.

For example, BofI has a checking account with no overdraft fees, no minimum balance fees, no monthly or startup fees and free ATM reimbursement across the country. It pays up to 1.25 percent interest if you use direct deposit and meet other conditions.

“We have a cost structure about half of that of a typical bank,” said Garrabrants. “We can provide better value to our customers. We can do that without causing them to give up customer service but simply allowing them to work with us through a variety of consumer channels, such as online chat.”

Founded in 2000, BofI went public in 2005 at $11.50 a share. Like many cyber banks, it was considered a novelty. Experts wondered if the business model of a pure Internet bank — built to be as lean as possible — really worked in the financial services industry.

Cyber banks attract mostly people shopping for the best interest rates on deposits and loans. Therefore, their cost of deposits tends to be high, while interest income from loans often is low.

Moreover, because Internet banks aim to keep costs lean, they often shy away from more profitable services that require hiring more people.

BofI Holdings indeed struggled to put deposits to work making loans in those early years. But that changed when Garrabrants joined the bank in 2007.

At first, he started purchasing loans from other banks, especially from struggling institutions looking to dump assets during the financial crisis.

“We had a specific of going to banks and saying, ‘Look, you have no choice but to sell assets,’” said Garrabrants. “We’ll look through $3 billion or $4 billion of assets, and we’ll take the best $50 million.”

Buying loans from other banks boosted BofI assets and financial performance in 2008 and 2009. But at the same time, Garrabrants was building in-house mortgage origination expertise.

He hired residential mortgage lenders from other institutions across the country that were downsizing or closing. The bank also tapped lenders with multifamily financing experience to boost its apartment lending business.

“Greg was able to hire that team,” said Andrew Liesch, a banking analyst with Sandler O’Neill Partners. “They’re spread throughout the country, and they originate single family jumbo loans all over — so much so that I believe 8 percent or 9 percent of the BofI’s single family jumbo loan portfolio is based in Manhattan.”

The moves began to pay off in 2010. BofI Holdings now has about $1.8 billion in loans, a vast majority of which are jumbo home loans and apartment mortgages. It no longer buys loans from other banks.

Building these and other businesses resulted in BofI Holding expanding from just 25 workers in 2006 to about 230 full-time employees today.

But it still has been able to maintain a cost advantage, say analysts.

“BofI has only one office and has an Internet business model that includes a number of affiliate relationships with organizations such as Costco and American Seniors Association,” said Donald Worthington, an analyst with Raymond James, in a research report. “It aspires to be the most innovative branch-less bank in the United States providing superior products and services through a diversified customer acquisition channel.”

At Costco, BofI is among the lenders that the warehouse retailer connects with its customers for mortgage services. The partnership gives BofI access to good credit borrowers nationwide for its jumbo loan products. It is one reason the loan-to-value ratio on the thrift’s single family loan portfolio averages is under 55 percent.

“They are very low loan-to-value, which is what you’d expect,” said Liesch of Sandler O’Neill. “In general, Costco customers are more wealthy than a Sam’s Club customer or a Wal-Mart customer.”

BofI posted net income of nearly $9 million for its most recent quarter, up 38 percent from the same quarter the prior year. Its shares have gained 58 percent so far this year.

Looking ahead, BofI has begun a business banking arm, raising $100 million in deposits in four months and hiring a few business bankers to lead the operation.

While he doesn’t expect BofI to become a mainstream small-business lender, Garrabrants believes there are certain business lending markets where the bank can excel.

“We’ve helped, for example, businesses with lines of credit to purchase fix-and-flip properties or to buy distressed notes,” he said. “It’s in our core expertise of real estate lending. We find niches we believe in.”